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Beacon Hill Institute’s Tax Analysis Modeling Program Brings Results

December 16, 2019
By David Tuerck

Profile of a partner organization in the freedom movement

The Beacon Hill Institute for Public Policy Research (BHI) was founded at Suffolk University in Boston in 1991 when research by BHI economists identified the costs of a proposed graduated income tax in terms of job destruction and disinvestment, and their work provided the intellectual ammunition to defeat the proposal. Ever since, the institute has been a source of reliable information and analysis for opinion leaders in Massachusetts and beyond.

Previously, most state tax policy discussion was limited to static analysis that assumed taxes pose no threat to economic growth. Basic economics, however, stresses that individuals respond to tax law changes, which affect not only tax revenues but the entire economy.

How can lawmakers identify the effects of tax-law changes on indicators of state economic activity (tax revenues, jobs, living standards) of importance to state tax policy? BHI provides a well-grounded answer with its flagship product, the State Tax Analysis Modeling Program (STAMP).

STAMP Acts

BHI’s comparative advantage is its ability to marshal the insights provided by STAMP and translate that knowledge into readable analysis for citizens, trade associations, editorial writers, and legislators.

“The accuracy of their economic modeling on what will happen on jobs and investment under certain scenarios is unparalleled,” said Jon B. Hurst, president of the Retailers Association of Massachusetts.

The institute is also capable of identifying the results of government reform—such as Act 10 in Wisconsin, which curtailed exorbitant contributions to public sector employees’ pensions. The institute found the measure enabled an increase in both private and public sector jobs.

In 2010, BHI, working with the Freedom Foundation, helped defeat a plan to enact an income tax in Washington State.

The STAMP model is versatile and can be extended beyond state income taxes. In 2009, Oregon considered joining a regional cap-and-trade compact. Using STAMP, BHI found the projected increases in fuel costs under cap-and-trade would cost Oregon up to 14,800 private-sector jobs by 2020. Todd Winn of the Cascade Policy Institute, who used the BHI results in his testimony at public hearings, said, “The state of Oregon and Oregonians alike owe a debt of gratitude to BHI for laying out the costs and implications of a cap and trade.”

BHI has provided support to partner organizations all over the country to assist in the pursuit of sound tax policy. To learn more, visit http://www.beaconhill.org.

David Tuerck (dtuerck@beaconhillorg) is president of the Beacon Hill Institute.